Only collective persons have an effective duty to file for insolvency, and they must do so within 30 days of the date of knowledge of such situation.
The law presumes this knowledge in certain cases, such as when the company is in general default of debts to the tax authorities and social security.
The duty to file for insolvency for collective persons is motivated by the protection of the expectations of creditors, as well as those of potential business partners of companies in a difficult economic situation.
One of the consequences of failure to comply with this duty may be the classification of the insolvency as culpable.
In the event that the insolvency is classified as culpable, the managers/directors of the insolvent company may be ordered to compensate the creditors, and be declared inhibited from carrying on trade, for a period that may vary between 2 and 10 years.
For natural persons, there is no real duty to file for insolvency, unless they are the owners of a company; which is equivalent to say that a person who only obtains her income through dependent work is not obliged to file for insolvency.
Even in the absence of such a duty, the timely filing of natural persons for insolvency is very important, since the law provides that natural persons who do not file for insolvency within 6 months of the occurrence of that situation may see refused the discharge of the remaining liabilities.
This is a consequence of the greatest relevance, considering the desired effect of debt forgiveness that can be achieved through the institution of exoneration of the remaining liabilities.
Also, the law provides that creditors may, in certain cases, and irrespective of the nature of their claim, apply for a declaration of insolvency of debtors, whether they are legal or natural persons.
This is the case, for example, when the owner of the company flees, abandons the place of headquarters or the main activity, or when there is a ruinous dissipation of assets in order to frustrate payment to creditors.
However, when a creditor applies for the debtor’s insolvency, the declaration of insolvency is not automatic – the debtor can object, but it is up to the debtor to prove that the situation of insolvency does not exist.
The importance of timely filing for insolvency by both collective and natural persons is therefore clear, even if only the former are required to do so.
These debts must be settled after the insolvency is closed, which can be done, if necessary, through payment plans with these entities; otherwise, the debtor’s income may be seized.
